In our previous article, we discussed the increase in claims alleging breach of whistleblower protections and explored how effective management of protected disclosures can mitigate or avoid subsequent claims.
The recent penalty ordered against TerraCom in relation to breaches of the whistleblowing provisions of the Corporations Act 2001 (Cth) (“Act”) is a stark reminder of the potential financial implications if protected disclosures are not effectively managed.
In 2020, TerraCom made public announcements which caused detriment, by way of hurt, humiliation, distress and embarrassment, to a protected whistleblower, despite the belief held by Terracom that the whistleblower had made a qualifying disclosure to two directors, who were eligible recipients of such a disclosure. ASIC alleged that the contravention was deliberate in nature and arose out of conduct of senior management.
On 26 August 2025 the Court ordered that TerraCom pay the Commonwealth of Australia a pecuniary penalty in the sum of $7,500,000 for contravention of the whistleblower protections under section 1317AC(1) of the Act, as well as $1,000,000 for ASIC’s legal costs. Justice Jackman noted that the penalty amount has the necessary “sting” to achieve deterrence.
This decision and the sizeable penalty is a reminder of the importance of organisations taking appropriate action in response to whistleblower disclosures and ensuring that no detrimental steps are taken against a protected whistleblower.
Speak to our experienced insurance brokers who can help you navigate this increasing risk.
